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US adds a solid 213,000 jobs; unemployment up to 4 pct

10 July 2018

Total nonfarm payroll employment increased by 213,000 in June and has grown by 2.4 million over the last 12 months. But in Friday's revised figures, BLS reports that the legal services industry actually gained 300 jobs in May, compared with April.

The unemployment rate rose to 4.0 percent from an 18-year low of 3.8 percent in June as more people entered the labor force in a sign of confidence in the jobs market. With 93 straight months of job growth - a historical record - many employers have said they're feeling pressure to raise wages. Among the strongest industries for job growth during the month was manufacturing, which extended a surge in hiring by adding 36,000 jobs even with tariffs in place.

Automakers added 12,000 jobs in June, but adverse trade developments could deflate the gain.

The U.S. Labor Department says for the first time in recorded history there is a greater number of job openings than people who are unemployed. "The unchanged 2.7 percent rise in June helps keep the Fed on a gradual path of rate hikes", MarketWatch said.

Wages were being carefully watched by economists for signs of inflationary pressures building in the economy, with average hourly earnings forecast to have risen 0.3% over last month in June and 2.8% over the same month a year ago.

This suggests that these 600,000 newly available workers can quickly find work if they have the right skills and that the unemployment rate will very swiftly fall back.

The Trump administration has also applied tariffs on steel and aluminum from allies like Canada and Mexico and has threatened to abandon the North American Free Trade Agreement with those two countries.

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Gross domestic product growth estimates for the April-June period are as high as a 5 percent annualised rate, more than double the 2.0 percent pace logged in the first quarter.

"Pay hikes haven't picked up as much as anticipated in light of the historically low jobless rate, but economists expect annual gains to reach 3 percent by the end of the year", USA Today said.

Here's what the latest report means for American workers and the U.S economy as we approach the second half of 2018. Economists project that the GDP growth will maintain the yearly pace of 4% or even higher in the second quarter.

The Labor Department will publish its closely watched employment report on Friday at 0830 EDT (1230 GMT).

Job gains in June could, however, come below expectations amid growing anecdotal evidence of worker shortages across all sectors of the economy.

Remaining slack in the job market could be keeping a lid on wage growth, said Cathy Barerra, chief economist at ZipRecruiter.

US adds a solid 213,000 jobs; unemployment up to 4 pct